The mortgage broking industry in Australia is a dominant component of the financial services sector with more than $350B per year in residential mortgages being written by brokers in recent times. Mortgage brokers account for more than 76% of all new residential mortgages written in Australia as consumers seek specialist advice and lender choice. Demand for skilled mortgage brokers is incredibly high in this fast paced and demanding industry.

It takes a certain type of person to achieve long-term success as a mortgage broker. It’s a challenging, highly competitive industry that requires competency and commitment to achieve results. The common traits of a highly effective mortgage broker include:

It’s a common misconception that successful mortgage brokers need to be ‘number‑crunching experts’. In reality, the most effective brokers are highly social, people‑focused, and exceptional communicators.

Much of your professional career as a mortgage broker is spent building long term relationships with refers and clients alike. If you are shy and introverted, it makes putting yourself out there that much harder.​

Mortgage broking operates within a complex and constantly evolving regulatory landscape. Brokers must be highly compliance‑focused, detail‑oriented, and adaptable to ongoing change.

Around 50% of a mortgage broker’s business comes from their established network of friends, family and existing clients. As a new broker starting out, you rely heavily on your pre-established networks for lead generation. Without the leverage of a pre-established network, kick staring your new business can be difficult.

Mortgage broking is fundamentally a sales business. Without a constant stream of new loans your business simply won’t survive. There is no shortcut to developing a sustainable source of new business. To succeed, you must be dedicated to generating new enquiries through consistent networking, business development and marketing activities.

A mortgage broker acts as the intermediary between the borrower and the lender. As part of their service offering a mortgage broker evaluates a client’s requirements, objectives and financial situation before recommending a lending product that is suitable to their client’s needs. The broker then facilitates the application process, managing the loan file from submission to settlement.

Beyond this, a mortgage broker conducts regular marketing, networking and retention activities to attract new clients which fuels business growth.

Mortgage Broking in Australia is a highly regulated industry. Mortgage brokers are on the front line of consumer lending and as such the industry is governed by laws designed to protect consumers and ensure brokers are acting in their best interest. Key compliance obligations for mortgage brokers include:

One of the first decision when entering the industry is whether to become an employee or start your own business.

Working as an employee in a supportive environment can teach a new broker valuable skills and provide financial security with regular income. On the downside an employee typically earns a smaller proportion of the commission and doesn’t retain ownership of the contact database or loan book.

As a small business owner, going it alone can be a very daunting task, especially if you are new to industry. Joining a broker group (like Zuu Money) can take away the hassle of starting your new business with plug-in business systems, professional mentoring and ongoing broker support. As a business owner you retain your contact database, client list and your trail income. Despite relatively low entry costs, it typically takes 6 to 12 months to establish a consistent income stream, so ensuring you have sufficient capital or alternate income is important.

One of the benefits of starting a mortgage broking business is the relatively low entry cost compared to other types of small businesses. The costs of setting up a mortgage broking business generally includes:

In addition to these fees and charges a mortgage broker will also need sufficient capital for:

Mortgage brokers earn income through upfront and ongoing commissions (known as trail commission) which is generally split between you and your aggregator. Commission splits can vary greatly depending on the level of support you receive and the volume of loans you settle. Components of the commission structure include:

Upfront Commission: Generally ranging from 0.65- 0.70% of the loan amount, upfront commission is paid to a mortgage broker on the settlement of a loan. Upfront commission is paid on the amount a borrower has drawn on their loan (not the loan limit) net of any funds the customer is holding in their offset account. Upfront commission is typically paid between 30 and 60 days from the settlement date.

Trail Commission: Trail commissions are paid monthly to a mortgage broker on an ongoing basis for the life of the loan – provided the loan is not in default or more than 90 days in arrears. Trail commission is paid on the outstanding balance of the loan net of any funds in a customer’s offset account. Trail commission is generally 0.15% of the loan amount.

Clawbacks: Lenders will reclaim, or ‘clawback’, upfront commissions if a loan is discharged within 18 months to two years of settlement – that is, a mortgage broker will have to ‘pay back’ some or all of their commission. This is because lenders have not made a return on the loan as a result of early discharge of the loan. A mortgage broker cannot recoup any clawback cost from their clients.